Business News

The surge in property prices has picked up pace, with a renewed increase in Dublin values.
Prices nationwide jumped by almost 12pc in the year to May, according to the Central Statistics Office (CSO).
This compares with an increase of 10pc in the year to April.

The rise for the month of April was 2pc, the fastest pace of property price inflation since April 2015. It comes after the Organisation for Economic Co-operation and Development (OECD) warned last month of “concerns that another bubble may be forming”.
The Fiscal Advisory Council also expressed worries about the risk to the economy of another housing boom.

These claims have been rejected by the Central Bank, which said mortgage lending remained “subdued” almost a year after the crash. It added that lending restrictions on borrowers and banks meant lending was not out of control.
But economists have warned about a “bubble” in site values and said prices were rising too fast, reflecting greater demand than supply.

They argue the help-to-buy scheme and the easing in lending limits for first-time buyers at the start of the year is boosting demand.
Dublin property prices recorded their biggest monthly increase in three years in May after muted growth in the first months of 2017.

The latest figures show that in Dublin prices rose by 11.2pc in the year to May.

The biggest increase was in the south-east region with jumps of close to 19pc in values.

Outside Dublin there was a rise of almost 13pc in prices for the year to May. Apartment prices in the rest of Ireland increased 20.6pc in the same period.
In the 12 months to May, the average market price paid by households for a dwelling was €249,358, the CSO said.

Average prices paid by households were higher in Dublin than in any other region or county, at €401,600.
Overall, the national index is 29.5pc lower than its highest level in 2007.

Economist with Merrion Stockbrokers, Alan McQuaid, said first-time buyers continue to be priced out of the market.
“Subsidising purchasers through tax breaks is not the answer, so maybe the time has now come to penalise investors,” he said.

The figures show that in the last year some 22pc of properties were bought by investors. A quarter were bought by first-time buyers, and half by movers.

But Goodbody economist Dermot O’Leary said the numbers using the help-to-buy scheme (HTB) were too small to explain the surge in overall prices.
“While HTB may be having some impact, the proportion of transactions that are eligible for this scheme is too small to explain the recent acceleration in price inflation,” he said.

In the first five months, transactions of new homes for first-time buyers accounted for just 2.2pc of total transactions nationally, Mr O’Leary said.

Davy Stockbroker economist Conall Mac Coille said new borrowers were being forced to borrow more.
The average mortgage approval to first-time buyers increased by 10pc in the year to May to €208,400.